The primary objective of this proposal is to elucidate the molecular mechanism governing vascular smooth muscle cell (VSMC) differentiation from neural crest stem cells (NCSCs). Abnormal VSMC differentiation contributes to a number of major cardiovascular disorders including the most prevalent forms of congenital heart disease (CHD). Both in vivo and in vitro studies have demonstrated that TGF- signaling is critical for VSMC differentiation from NCSCs. However, the molecular mechanisms underlying the complex activities of TGF- on this process remain largely unknown. By utilizing in vitro model systems we found that the TGF- downstream intermediate Smad2, but not Smad3, is critical for TGF--induced VSMC differentiation from NCSCs; while Smad3, but not Smad2, is important for VSMC differentiation from mesenchymal- originated (non-NCSC) C3H10T1/2 cells. These findings strongly support the hypothesis that Smad2 acts as an important and specific mediator of TGF- in VSMC differentiation from NCSCs. More importantly, we made the novel observation that Smad2, but not Smad3, is required for VSMC marker gene activation in NCSCs. We also found that myocardin-related transcription factor B (MRTFB) contributes to VSMC specific gene activation in NCSCs. To investigate the mechanism by which TGF- regulates VSMC differentiation from NCSCs, we will focus on two Specific Aims. In Aim 1, we will study the molecular mechanisms underlying the Smad2 function in VSMC differentiation from NCSCs. We will determine how Smad2 regulates transcriptional activation of VSMC marker genes, and determine if Smad2 interacts with MRTFB in controlling marker gene promoters. In Aim 2, we will test the hypothesis that Smad2 is essential for VSMC differentiation from NCSCs in vivo, using a neural crest tissue-specific knockout (Wnt1-Cre) mouse. The specificity of Smad2 in NCSCs will be further tested by mutating Smad2 gene in VSMC of non-NCSC origins by using a SM22-Cre mouse. NCSC differentiation is a complex process modulated by multiple factors, including TGF- and its family members. Through a combination of biochemical, molecular, cellular and developmental biological techniques, the function of Smad2 in VSMC differentiation will be thoroughly studied. Accomplishment of the proposed studies will significantly advance our understanding of the molecular mechanism by which TGF- regulates NCSC differentiation to VSMC and contribute to the development of novel therapeutics for the treatment of human cardiovascular diseases including CHD. Moreover, since Smad2 is specific to the VSMC differentiated from NCSC while Smad3 is specific to the VSMC from mesoderm, our studies will likely provide new revenues for drug intervention specifically targeting at diseases that are caused by abnormal function of VSMCs from different origins.